Understanding The Importance Of Title Insurance

I attended an informative seminar on Title Insurance recently at Westerly Community Credit Union. Peter Lewiss, Esq., Lewiss Law Associates, LLP and Linda Rekas Sloan, Esq., Commonwealth Land Title Company presented some invaluable information on this important, but little known topic.  Title insurance can prove to be invaluable to you as a homeowner, and to your lender, if you have a mortgage the property. Without it, you and your lender may face substantial monetary loss.  

In a nutshell, Title Insurance is contract that indemnifies a property owner lender from monetary loss for a hidden defect in the title (unless it is excluded or excepted), that may come as a result of fraud, forgery, or human error. While your title search will uncover most problems, sometimes a defect doesn't rear it's head until after closing, such as, unknown heirs, un-filed liens, unpaid judgements, improperly executed or indexed documents.  

If you are taking out a mortgage, your lender will require you to purchase a Lender's Policy. The Lender's Policy will protect your lender should a defect in title arise, making the lien unenforceable.  A Lender's Policy, however, will not protect you as the owner of the property. This is where an Owner's Policy comes into play. By purchasing your Owner's Policy at the same time as your Lender's Policy, you can be issued a credit, saving money overall on your premiums. 

Premiums are regulated by the state and are based on purchase price or loan amount. It is a one-time payment that protects you for the life of the mortgage or your entire duration of home ownership. As a property owner, additional coverage may also be purchased for even more protection. 

When you are in the process of purchasing a new home, be sure to speak with your attorney about the benefits of a Property Owner's Title Insurance Policy. 

As alway, I welcome your feedback and thoughts.

Be well,
Rhonda